Equity research Candles Scandinavia Q2 2025/26: First impression – Solid growth, integration hampers margins in the short-term

Today, Candles Scandinavia published its interim report for the second quarter of 2025. Below is a compilation of our first impressions of the outcome, including deviations from our estimates.

Candles Scandinavia’s net sales increased by 143 per cent, boosted by the acquisition of HashtagYou. The outcome also suggests solid underlying organic growth, albeit compared to a pretty weak comparison period for the Private label operations in 2024. Hence, the pickup in volumes in recent quarters appears to have continued. However, the decrease in profit (EBITDA) was unexpected to us. Candles plans to transfer production from HashtagYou’s external suppliers to its own Örebro facility in the first half of 2026 and reiterates the target of SEK 40-45 million in profit improvement after the completion of integration. Candles has a strong focus on executing synergies and expects an increase in profitability in 2026, with a tilt toward the second half of the year, driven by higher margins, increased production capacity, and an international portfolio of both brands and customers. In conclusion, we are encouraged by the solid growth displayed by both Private Label and D2C units, although costs have been initially higher than we had expected. Hence, we are likely to make some downward adjustments to our profit estimates in the short-term following the report.

• In Q2 2025, Candles Scandinavia reported net sales of SEK 148m, corresponding to a 143% growth. Our estimate for the quarter was net revenues of SEK 147m.
• EBITDA decreased to SEK 8.4m (11), corresponding to a margin of 5.7%. Our estimate was SEK 15.5m, equivalent to a margin of 10.5%. The main deviation from our estimate is higher costs. Although Candles does not break out individual cost items on a quarterly basis, we infer that expenses related to the integration project were initially elevated. Additionally, the full impact of the 25 FTE staff reduction in manufacturing, announced earlier in the year, is not yet visible.

We intend to provide an updated research report of Candles Scandinavia shortly. Read the last research update report here.

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